The Australian Accounting Standards Board (AASB) is nearing the completion of the first Australian Sustainability Reporting Standards (ASRS), following a discussion of final working drafts at its recent meeting. The two standards under consideration are AASB S1 General Requirements for Disclosure of Sustainability-related Financial Information which is a voluntary standard and AASB S2 Climate-related Disclosures, a mandatory standard.
Both AASB S1 and AASB S2 are set to become effective from 1 January 2025 and will apply to both profit and not-for-profit entities. The final standards will be issued once the Climate-related Financial Disclosures Bill is passed by the House of Representatives, which is scheduled to sit the week beginning 9 September 2024, marking the earliest potential date for the Bill’s finalisation.
AASB S1 is a voluntary standard focusing on general requirements for sustainability-related financial information, while AASB S2 is a mandatory standard specifically for climate reporting, aligning with the recently Senate-approved Climate-related Disclosures Bill.
AASB S1 is a voluntary one and adopts all IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information without any modifications.
AASB S is a mandatory standard that incorporates selected content from AASB S1 necessary for it to function as a standalone standard for climate-related financial disclosures. This content is detailed in Appendix D of AASB S2. Unlike the ISSB Standards, AASB S2 does not require consideration of industry-based metrics or adherence to the Sustainability Accounting Standards Board (SASB) Standards.
“These first two Australian Sustainability Reporting Standards will strengthen the ability of Australian entities to participate on the international stage. We congratulate all stakeholders that worked together to realise this achievement in such a short time. The stage is now set in Australia for mandatory climate-related financial disclosures with the parliamentary process poised to finalise the legislative mandate; the AASB to finalise these first sustainability standards; and the AUASB to complete its consultations on the related assurance roadmap,” said Adrian King, Partner in Charge, ESG Advisory & Assurance, KPMG Australia.